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Office of the State Comptroller - Local Government & School Accountability

Local Government and School Accountability

Multiyear Financial Planning

A Tutorial for Local Government Officials

Module 1: Elements of a Successful Plan
The Process of Multiyear Financial Planning

STEP 3: Select a level of detail that meets your needs and capacity. For example, New York City does a lengthy, line-item plan with narrative detail about economic projections and policy changes at the federal, State, and local level. Other large cities in the State such as Rochester and Syracuse also do line-item plans, although with relatively less complexity and narrative. Most smaller cities that started planning under AIM use OSC's template that shows major revenue categories (real property tax, sales and use taxes, departmental income, etc.) and breaks expenditures down along broad object and function categories.

In either case, keep your forecasting as streamlined as possible by keeping simple rules of thumb for all but the largest and most volatile elements. For example, many non-personal expenditures are driven by inflation once you project the expected Consumer Price Index, you can apply that growth rate to a single "non-personal service" aggregation or to nearly all line items that would fall under that category. For more information, see sections on projecting revenues and projecting expenditures.

Be comprehensive enough to ensure that the plan accurately describes the operations of your government. Include all revenues and all expenditures, even if you aggregate them, so that you can assess the bottom line. Make sure to include all relevant funds. Most plans include the general fund and any major operating funds guaranteed by the general fund or that receive transfers from it. Cities generally include water and sewer funds, if applicable, and towns often include highway funds. However, most do not include other enterprise funds or small special purpose funds supported by dedicated revenue streams.

  Next: Step 4 - Describe Your Assumptions